Stratoflex, Inc. v. Aeroquip Corp.

• Decision Date: 16 August 1982
• Docket Number: Civ. A. No. 79-70017.
• Citation: 561 F. Supp. 618
• Parties: STRATOFLEX, INC., Plaintiff, v. AEROQUIP CORPORATION, Defendant.
• Court: U.S. District Court — Western District of Michigan

561 F. Supp. 618

STRATOFLEX, INC., Plaintiff, v. AEROQUIP CORPORATION, Defendant.

Civ. A. No. 79-70017.

United States District Court, E.D. Michigan, S.D.

August 16, 1982.

Neal Waldrop, Troy, Mich., for plaintiff.

Don Harness, Birmingham, Mich., for defendant.

OPINION AND ORDER GRANTING JUDGMENT IN FAVOR OF PLAINTIFF

PATRICIA J. BOYLE, District Judge.

Plaintiff, Stratoflex, Inc., a Texas corporation, seeks a declaratory judgment declaring invalid and non-infringed United States Patent No. 3,473,087 ('087) issued October 14, 1969, and owned by Defendant, Aeroquip Corporation, a Michigan corporation, which has counterclaimed against Stratoflex for infringement.

In essence, Defendant alleges that the claims of the '087 Patent in suit are product claims, not limited to the mixing method referred to in the patent. In their broadest form, the claims at issue cover a composite extrudate or tubing having an inner tubular extrusion comprising electrically conductive particles and Teflon™ and an outer extrusion of Teflon.™ Plaintiff's composite electrically conductive tubing is alleged to contain all elements of Defendant's product claims and, hence, to infringe the '087 Patent.

Pursuant to Federal Rule of Civil Procedure 52(a), the Court makes the following findings of fact and conclusions of law.

The technology in question is polytetrafluoroethylene (PTFE) Teflon™ hose used in the aircraft and missile industry to convey fuel, lubricants and other fluids. Both Stratoflex and Aeroquip are manufacturers and suppliers of PTFE hose, fittings, couplings, and related equipment for industrial and military use. In general the hose is a tube reinforced with one or more braids of fiber or metal wire. Fittings are connected to the hose ends and sold as hose assemblies. Aeroquip owns the patent in suit which was acquired in the purchase of a portion of the business of Raybestos-Manhattan, Inc. Stratoflex is the only manufacturer of electrically conductive aircraft hose which is not licensed in the United States under the '087 Patent. The electrically conductive PTFE hose sold by Defendant Aeroquip is a composite hose having an inner layer containing carbon black and an outer layer of white or unfilled PTFE containing no carbon black. The hose sold by Plaintiff Stratoflex also has an inner portion containing carbon black and an outer portion containing about 0.1 percent by weight of carbon black. Plaintiff's hose thus appears black throughout.

The parties agree that in 1959, roughly contemporaneous with the development of hydrocarbon fuel for use in jet engine assemblies, leakage problems were discovered in Teflon™ hose tubing in military jet aircraft fuel systems. At this time, military specifications did not set forth minimum electrical conductivity requirements for aircraft hose. The leakage occurred because of failures consisting of pinholes in the walls of the hose, allowing leakage of fuel through the hose.

Three types of Teflon™ tubing were being sold as aircraft hose, white or unfilled PTFE, sold by Titeflex, pink PTFE sold by Aeroquip, and black PTFE manufactured by Resistoflex and B.F. Goodrich, Plaintiff's supplier at the time. The black tubing took its color from a small amount of carbon black (0.01 percent to 5 percent), dispersed uniformly through the tube and used as an extrusion aid according to the teaching of the Walker patent, No. 2,752,637, issued in 1956. The pinhole leaking problem was initially observed in products supplied by Titeflex and Aeroquip. No field complaints were received as to the black B.F. Goodrich hose sold by Stratoflex.

Pure Teflon™ tubing is highly suitable for aircraft fuel systems because it is chemically inert, does not degrade with time, and is stable at high temperatures. While carbon black had been used as an extrusion aid by some manufacturers and was a known electrical conductor, a large amount of carbon in the tube wall would create more discontinuity and potential for fuel seepage through the wall.

Beginning in 1959, Aeroquip engineers conducted an investigation of the pinhole leak problem. In April, 1961, J.C. Abbey, Aeroquip's Chief Engineer, and T.E. Upham, a Staff Engineer, presented a report to the Society of Automotive Engineers attributing the problem to the buildup of static electricity caused by the flow of hydrocarbon fuels through the PTFE hose and the subsequent discharge or arcing of electrical charges through the wall of the tubing. The Abbey-Upham Report found failures of all three types of tubing (red or pink, white, and black) due to electrostatic discharge, although the carbon black filled tubes demonstrated markedly greater resistance to breakdown, and it was postulated that "the greater resistance to breakdown exhibited by the carbon black filled tubes was due to the ability of the carbon to increase the conductivity of Teflon." Abbey-Upham Report, Exhibit 10 at 14. In testing, the red tubes failed at two hours; the white tubes, at three hours; and the black tubes, respectively, at fourteen and one-half hours and fifteen hours. Based on these results the report concluded that "the susceptibility of Teflon lined hose to pinhole failure, under the reported conditions, is proportional to its electrical conductivity. The higher the level of conductivity the greater the protection afforded." Id. 23.

The Abbey-Upham Report considered the "possibility of establishing continuous longitudinal strings of carbon particles during extrusion" to provide continuous conductivity, but deemed this possibility "remote." Id. 17.

The Aeroquip investigation by Abbey-Upham sparked a joint investigation with Raybestos-Manhattan, Inc., a Teflon™-tube supplier, to seek a solution to the electrostatic fuel failure problem. The goal was to develop an electrically conductive PTFE tubing, which would also have superior resistance to fuel effusion or leaking. This work culminated on May 22, 1962, in the filing of the '087 Patent whose claims are in issue. W.L. Slade, an employee of Raybestos, is the inventor of the patent.

Almost simultaneously Titeflex initiated its own development program. This program resulted in the development of the tubing which is the subject of the Rowand and Larose patent, United States Patent No. 3,166,688, filed November 14, 1962. This patent was the subject of the interference proceedings initiated by Slade's attorneys. Specifics of the claims and the result of the interference are discussed infra.

Plaintiff's Activities in PTFE Hose

Prior to 1962 Plaintiff purchased "standard" black hose from B.F. Goodrich, manufactured under a license from Resistoflex under the Walker patent, United States Patent No. 2,732,637, which relates to improving the extrusion of PTFE by employing 0.01 percent to about 5 percent by weight of carbon. As noted earlier, neither B.F. Goodrich nor its customer, Stratoflex, received complaints that there were field pinhole failures of this hose. Moreover, tests conducted at Titeflex in December, 1962, demonstrated that Stratoflex all black tubing was conductive.

As a result of a desire by Curtis Wright to use a more highly conductive hose for fuel transfer in its jet engines, Mr. Horace Cooke of Stratoflex asked B.F. Goodrich in December to provide him with a sample hose which was more electrically conductive than the standard black. Within three days B.F. Goodrich provided samples of a black, highly conductive tubing having an inner liner enriched with carbon black and an outer layer also containing a small amount of carbon black. Before the samples were made, B.F. Goodrich consulted its licensor, Resistoflex, which provided a back-up composite preform for B.F. Goodrich to use. There is no evidence that Resistoflex was aware of the composite tubing which Aeroquip and Titeflex also demonstrated in the Curtis Wright tests. B.F. Goodrich, moreover, did not use the Resistoflex preform but rather made its own.

The test results were inconclusive "and no one type showed superiority over any other." Thereafter, the Bureau of Standards established electrical conductivity standards for aircraft hose, as did the military.

From 1963 forward, Stratoflex continued to purchase hose from B.F. Goodrich until 1970 when B.F. Goodrich terminated the production of composite conductive tubing. Stratoflex then purchased its electrically conductive tubing from Titeflex.

In 1975 Stratoflex established a relationship with Mr. John Millard, an employee of Uniroyal, with the intention of beginning manufacture of its own hose for commercial and military sale. Beginning in 1977, Stratoflex manufactured commercial or transparent Teflon™ hose and black electrical conductive aircraft hose designated as 124 and 127.

As manufactured presently, Stratoflex hose 124 has an inner layer containing 2.0 percent by weight of carbon black uniformly dispersed. The outer layer contains .01 percent of 1 percent, see p. 106 Vol. I. This amount of carbon black is used as a processing aid, and there is no difference in the performance or functioning of the electro-conductive tubing or in its ability to meet military specifications by virtue of the inclusion of this amount of carbon in the Stratoflex product. The "salt and pepper" technique is not employed by Plaintiff to incorporate the carbon black into the PTFE solution.

The Stratoflex electrically conductive tubing is formed by extruding an extrudate having an inner layer or extrusion portion comprised of particles of unsintered¹ tetrafluoroethylene polymer and pulverulent, inert electrically conductive carbon black particles, and having an outer layer of unsintered tetrafluoroethylene polymer containing the previously described amount of carbon black.

After extrusion, the tube is sintered, producing an electrically conductive tubing formed of attached concentric layers, the inner annular portion consisting of a uniform dispersion of electrically conductive particles and the outer layer being relatively...